April 13, 2011

NY Man Claims Ownership Stake In Facebook

A New York salesman who claims he has an ownership stake in social networking titan Facebook is now seeking 50 percent of the site's value from founder Mark Zuckerberg.

In a federal court complaint filed last year, Paul Ceglia sought restitution from the social network for 84 percent of its worth. He cited a contract between he and Zuckerberg signed in 2003 that gave him half of the business, plus more if the launch was delayed.

He alleges that he has email exchanges with Facebook CEO Zuckerberg, discussing the 2003 contract and also talks on the early development of the site, originally dubbed "The Face Book."

The lawsuit also says Ceglia gave Zuckerberg $1,000 to help him get Facebook up and running.

Ceglia filed a revised claim against Facebook on Monday, in which he said he had evidence that showed he was entitled to at least half ownership of the business.

In the revised complaint, Ceglia agreed to waive the late-penalty clause before the site launched in 2004.

Facebook continues to downplay the claims against the social networking site, which is reportedly valued at more than $55 billion.

"This is a fraudulent lawsuit brought by a convicted felon, and we look forward to defending it in court," Facebook attorney Orin Snyder told Bloomberg. "From the outset, we've said that this scam artist's claims are ridiculous and this newest complaint is no better."

Ceglia, citing on behalf of the supposed 2003 contract, said the original 84 percent claim against Zuckerberg was sparked due to a one percent per day penalty for every day the site went past the due date: 34 days to be exact.

Ceglia has faced legal problems of his own in recent years. A NY Attorney General took out a restraining order against his company -- a wood-pellet fuel marketing business -- in December 2009. Authorities claimed Ceglia lied and repeatedly took customers' money then failed to deliver product or issue refunds.

According to the Facebook complaint, Ceglia dropped his initial claim for the additional percentage after Zuckerberg protested the terms.

"Zuckerberg sent to Ceglia emails complaining that a provision in the agreement giving Ceglia an additional 1 percent interest in the business for each day after Jan 1, 2004 that 'The Face Book' website wasn't complete, was unfair because it would give Ceglia more than 80 per cent ownership of the business, including thefacebook.com website," the filing read.

Snyder calls Ceglia a scam artist. In July 2010, another Facebook attorney said Zuckerberg and Ceglia worked on another website, but not Facebook.


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